Our next criticism of Missouri’s pending Exam Handbook is its violation of the Four Corners Rule, which requires a document to stand on its own when being interpreted and applied. Common law precludes parties from going to outside sources when applying the document to different situations. While the Handbook gives lip service to the Four Corners… Continue Reading
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Missouri’s Exam Handbook: Reviewing All Contracts for What Purposes?
Posted in Exams/audits, Missouri - SB1, UncategorizedThe newest edition of the Missouri Preneed Exam Handbook has some significant problems. The one we will discuss today is ambiguous instructions regarding the review of preneed contracts. Paragraph 13 of the Handbook’s scope of financial examination states: 13) Staff shall look at 100% of all active preneed contracts that have been sold since the period… Continue Reading
Missouri’s Preneed Exam: Prioritizing the Exceptions
Posted in Exams/audits, Missouri - SB1“Nitpicking” was one of the terms frequently used by Missouri funeral directors when referencing their preneed exam exceptions report. (Other descriptions are not appropriate for print.) The initial exam guideline provided no guidance to examiners for prioritizing problems found in preneed contracts and records. It was common to see exception reports with dozens, even hundreds,… Continue Reading
Missouri Preneed Exams: Examiner Desk Top Reviews
Posted in Exams/audits, Missouri - SB1The Missouri State Board’s proposed exam handbook would have examiners perform more of their review before an onsite visit is scheduled at the funeral home. By performing a desk top review, the examiner would be better prepared when visiting the funeral home. This should expedite the examination process. There would be four stages to the… Continue Reading
Missouri Preneed Exam Procedures: New Receipt and Transmission Records
Posted in Exams/audits, Missouri - SB1, RecordkeepingMissouri’s pending preneed exam handbook will establish a new record keeping requirement for the state’s preneed sellers: monthly records of consumer payment receipts and the transmission of those funds to the preneed funding agent. Seller record keeping proposals are not new to the Board. (Missouri Seller Records: The State Board Proposal) The Board’s staff proposed… Continue Reading
Missouri’s Next Preneed Exam Manual: Start Following the Money
Posted in Exams/audits, Missouri - SB1, Recordkeeping, UncategorizedThe Missouri State Board of Embalmers and Funeral Directors introduced a new preneed examination handbook at its October meeting. (Click the following hyperlink to access the preneed handbook.) The proposed handbook would change the emphasis of the preneed exams from contract and recordkeeping compliance to tracking consumer funds paid to the funeral home. For most… Continue Reading
The Missouri State Board: But Will the Division Change its Ways?
Posted in Exams/audits, Missouri - SB1The rift between the Missouri State Board of Embalmers and Funeral Directors and their Executive Director culminated in her resignation effective June 30th. Over the course of the past several years, the State Board drew the ire of the industry in a number of ways. The staff implemented regulation proposals before they were officially promulgated,… Continue Reading
Missouri Preneed Exam Procedures: Industry Expertise
Posted in Exams/audits, Missouri - SB1, UncategorizedOur first recommendation to the Missouri State Board of Embalmers and Funeral Directors is that they assume, and maintain, control over the preneed examination procedures. The exam procedures implemented two years ago were never submitted to the Board for review and approval. Accordingly, the examination procedures handbook should remind the staff that any change made… Continue Reading
Dialing It Back to Zero: Missouri Reboots it’s Exam Process
Posted in Exams/audits, Missouri - SB1With an action that caught some by surprise, the Missouri State Board of Embalmers and Funeral Directors voted to suspend future preneed examinations and accept recommendations on a new process. We have made several posts on the faults of the Missouri examination process, and now commend the Board on taking a bold action. The Missouri… Continue Reading
A Call for Comments: Missouri’s Preneed Exam Handbook
Posted in Exams/audits, Missouri - SB1To begin reform of its preneed exam process, the Missouri State Board of Embalmers and Funeral Directors is seeking input from the industry by this Friday, June 8th. Specifically, the State Board is requesting comments to the Exam Procedures Handbook prepared by its staff. We have made edits to that handbook, and will provide more… Continue Reading
Missouri’s Adequate Preneed Records: Performance and Cancellation Records
Posted in Exams/audits, Missouri - SB1, RecordkeepingWhen the State Board approved a new “adequate seller records” rule on April 25th, there wasn’t much discussion of the documents or reports to be maintained for performed and canceled preneed contracts. In a sense, the Board may not need to expand beyond the FTC’s statement of goods and services requirement. If a funeral home… Continue Reading
Missouri’s Adequate Preneed Records: Receipt and Transmittal Records
Posted in Exams/audits, Missouri - SB1The Missouri funeral industry has haggled with the State Board for two years over preneed record requirements. But on April 25th, the State Board scrapped the staff’s adequate record proposal, and instead, adopted a brief definition of ‘seller records’. The State Board’s approach will afford funeral homes more flexibility in documenting the receipt of consumer… Continue Reading
Missouri State Board: New Leniency for Annual Reports
Posted in Missouri - SB1Another welcomed change made by the State Board on April 25th was to approve an extension on the filing of annual reports. Missouri has one of the shortest periods (60 days) for filing a preneed annual report. Neighboring states not only granted more time (Illinois 75 days, Iowa 105 days and Nebraska 150 days), they… Continue Reading
Missouri’s Funeral Board: Taking Back the Reins
Posted in Exams/audits, Missouri - SB1The April 25th meeting of the Missouri State Board of Embalmers and Funeral Directors marked an important transition where industry members assumed control over the protection of consumers’ preneed funds. After the first round of financial examinations, the Board’s procedures for the second round were defined by the Board’s staff, and never submitted to the… Continue Reading
Missouri Preneed Examinations: The Doctrine of Semi-Absurd Statutory Construction
Posted in Compliance, Exams/audits, Missouri - SB1Missouri funeral homes are frustrated with the State Board of Embalmers and Funeral Directors. The second round of preneed examinations has begun, and the Board’s staff is citing sellers for “new” contract form violations on “old” contracts. Examiners are reviewing all outstanding contracts, including those covered in the seller’s first examination, and now citing the… Continue Reading
The Missouri Funeral Board: Was There a 2014 Warning?
Posted in Compliance, Missouri - SB1Starting with its 2014 fiscal year, the Missouri State Board of Embalmers and Funeral Directors has initiated 334 complaints against Missouri funeral homes. That is an average of 11 complaints per month. During the four years that preceding 2014, the State Board filed only 77 complaints against funeral homes, or an average of 1.5 complaints… Continue Reading
Missouri State Board of Embalmers and Funeral Directors: Ten Years after NPS
Posted in Compliance, Exams/audits, Missouri - SB1Ten years after the collapse of NPS, the Missouri State Board of Embalmers and Funeral Directors has a confidence problem with licensees and legislators. Licensees see a regulator that is obsessed with DBAs, renewal reports, and exams that focus on contract provisions. Legislators see a regulator that will not fulfill the SB1 mandate to protect… Continue Reading
The Missouri Board Chairman’s Rally Cry: Follow Me, Boys!
Posted in Exams/audits, Missouri - SB1, Recordkeeping, Reporting, UncategorizedPursuant to a notice that may, or may not, satisfy state law, the Missouri State Board of Embalmers and Funeral Directors met in closed session this morning. At the State Board’s December meeting, Division counsel advised that 24 hours’ notice to the public was required to amend the Board’s agenda. Notice of this 9:00 am… Continue Reading
Missouri Seller Records: The Starting Point for an Audit Trail
Posted in Exams/audits, Recordkeeping, UncategorizedThe last time the Missouri State Board of Embalmers and Funeral Directors took up the issue of preneed seller record keeping requirements, the staff proposal emphasized a contract ledger approach. The proposal sought to require a contract record that reflected the amount and date of each payment received and the corresponding dates and amounts deposited… Continue Reading
Missouri’s Funeral Board: Returning to the Scene of the Crime
Posted in Exams/audits, RecordkeepingTwo years ago, the Missouri State Board of Embalmers and Funeral Directors met in Independence to discuss their staff’s recommendations for seller record keeping requirements and the scope of preneed examinations. As the minutes somewhat reflect, the staff proposals were met with strong public opposition. (This blog documented those issues in prior posts that are listed… Continue Reading
Missouri Preneed Examinations: An Important Pivot
Posted in Exams/audits, Missouri - SB1, UncategorizedIn their last meeting, the members of the Missouri State Board of Embalmers and Funeral Directors took a small, but important pivot in the preneed examination process. The State Board approved a recommendation made by the Financial Examination Committee that the Committee review each examination report and prepare the letter that accompanies the report to… Continue Reading
The MFT Complaint: A Sham Seller
Posted in Compliance, Exams/audits, Missouri - SB1, Recordkeeping, UncategorizedIn paragraphs 53 through 71 of the MFT Complaint, the State Board sets out certain duties that only a licensed Missouri preneed seller may perform. The Complaint asserts that these seller duties are either being performed by the funeral homes that contract to be ‘providers’ with the MFT, or by Eagle Bank as trustee for… Continue Reading
The MFT Complaint: Rollovers and Sellers
Posted in Administration, Exams/audits, Missouri - SB1, RecordkeepingIn our prior post, we looked at Paragraphs 39 through 52 of the Complaint filed against the Missouri Funeral Trust, and the implications of Missouri’s Common Trust Fund law. In this post we will look at paragraphs 79 through 95 of the State Board Complaint, and what exposures rollover funeral homes could have. The Complaint… Continue Reading
The MFT Complaint: Rollovers and Common Trust Funds
Posted in Administration, Investments, Recordkeeping, ReportingIn paragraphs 39 through 52, and paragraphs 79 through 95, of the Complaint filed against the Missouri Funeral Trust, the State Board of Embalmers and Funeral Directors raises issues with regard to the preneed trusts that were transferred by funeral homes to MFT. The re-write of Missouri’s preneed law in 2009 provided the MFT an… Continue Reading